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Draft ordinance on vehicles for hire is out

Mayor Parker puts another item on City Council’s to do list.

A proposed Houston ordinance could legalize hundreds of for-hire drivers providing rides through smartphone applications, but would require those drivers meet the same permitting and safety requirements as taxicab and limousine drivers already regulated by the city.

Under the proposal by the city’s Department of Administrative and Regulatory Affairs, the ride-sharing services would have to meet the same standards for fingerprint-based background checks and vehicle inspections already required of cab and limo drivers.

Other city and state governments have allowed the companies to do their own record checks based on Social Security numbers, or loosened inspection rules.

The proposed ordinance also would set fees for the new services based on revenues, allow all for-hire drivers to charge for no shows, mandate all companies accept credit cards, eliminate a 30-minute wait requirement for “pre-arranged” pick-ups, and drop a $70 minimum limo fare originally designed to shield the taxicab industry.

“We see this as leveling the playing field,” said Tina Paez, head of the city’s regulatory affairs department. “Uber and Lyft will probably tell you we’re overreaching. If there is some compromise that council makes, I hope it’s one that still works for passengers in terms of public safety.”

[...]

Yellow Cab lobbyist Cindy Clifford said technological advancement does not preclude businesses from following existing law, nor should it weaken standards set in the proposed ordinance.

The city, she said, should set a cap on the number of licensed drivers and keep the $70 minimum limo fare intact.

“If you flood the market with drivers, it will be very hard for anyone to make a decent living,” Clifford said.

For example, she said, existing rules require cab and limousine companies to serve all neighborhoods at all hours, regardless of profit margins and overhead costs. Under the proposed ordinance, she said it appears Uber and Lyft could ignore low-profit calls.

“A lot of our business is taking people to the grocery store, to their doctor’s appointment,” Clifford said. “They’re not always lucrative trips. That’s balanced by the fact drivers have access to other trips.”

You can see the draft ordinance here. As you know, I don’t agree with the belief that the vehicle for hire market in Houston is zero sum. The market will definitely change when Uber and Lyft are allowed in, and those changes may well not be beneficial to the legacy cab companies, at least in the beginning, but I am persuaded that on balance these changes will be beneficial for customers. It’s interesting to me that the cab companies are now touting the Seattle solution, which suggests to me that they don’t think they can keep Uber and Lyft out all together. Falling back on limiting the total number of drivers seems to me to be their way to mitigate the damage. There may be some merit to this approach – I’m a bit dubious, but I am willing to give it six or twelve months to see what the effect on the market has been.

Anyway. I sent emails to spokespeople for Uber and Lyft to ask for their comment, as they hadn’t had much to say in time for the Chron story. This is what I got from Lyft:

The proposed ordinance marks a starting point to a thoughtful discussion around Lyft in Houston. The people of Houston have enthusiastically welcomed Lyft to the city for affordable, convenient and safe rides. We will continue working with city leadership toward a solution that prioritizes safety, innovation and consumer choice.

I didn’t get a response from Uber by the time this was published. If I get one later, I’ll add it. What do you think of the draft ordinance? Hair Balls has more.

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2 Comments

  1. Bill Shirley says:

    “existing rules require cab and limousine companies to serve all neighborhoods at all hours,”

    A unenforceable, unfollowed, and unenforced rule. I’ve been stranded at the hospital on a Saturday night because cab companies didn’t want to go to the medical center.

  2. Charles,

    The “Seattle Solution” apparently wasn’t perceived as such by a relevant portion of Seattle voters: http://www.geekwire.com/2014/ride-sharing-petition-seattle/

    Chris

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